Useful or Creepy? The Effect of Exchanged Benefits and Information Collection in Social Media Advertisements

Abstract

As digital businesses increasingly use covert methods to collect consumer data for targeted advertisements, many consumers perceive these practices as intrusive. While recent research indicates a willingness to share personal information for rewards, there is limited understanding of the factors motivating such disclosure, particularly in social media advertising. An online survey of 199 U.S. Instagram users revealed that exchanged benefits (e.g., monetary rewards and personalized product recommendations) led to a higher willingness to disclose information through a trade-off between benefit and risk, which in turn led to higher click-through and purchase intentions. However, the proposed moderating role of the information collection method (e.g., overt vs. covert) was not found to be significant. This study offers valuable insights for practitioners, which can be utilized to foster positive consumer attitudes in social media advertising.